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Finance issues still a barrier

New research shows improved access to finance increases numbers of women in business.

Two new sets of research, one from the Women’s Business Council and one from Social Enterprise UK, have identified access to finance as one of the main barriers to increasing the numbers of women in business.

As a government advisory group, the Women’s Business Council worked closely with members of the banking industry to identify ways to maximise women’s economic contributions.

One of the recommendations in the Council’s June 2013 report was ‘inclusivity – ensuring gender equality is embedded into everyday business practice,’ with particular note taken of the need for flexible working and the ‘untapped potential’ of women in the third phase of their working lives.

The report could be seen as part of the government’s response to criticism about the rise in female unemployment.

In April 2013, the Fawcett Society warned about the UK’s female-unfriendly labour market.

Ceri Goddard, the organisation’s chief executive, said that if women continued to make up the majority of those that lost their jobs, but the minority of those being hired in new roles, the strides women have made in the workplace in the last half a century risk being undermined just when women, the families many of them support and our economy need them more than ever.

The Women’s Business Council addressed the business case for more women in the workforce, saying there were over 2.4 million women who were not in work but want to work, and over 1.3 million women who wanted to increase the number of hours they work.

And if women were setting up and running new businesses at the same rate as men, we could have an extra one million female entrepreneurs.

‘They are,’ the Council concluded, ‘currently only half as likely to do this, and they and the economy pays the price.’

One of the chief recommendations the Council makes for increasing the numbers of women who start and run their own business is to increase the availability of role models. More than 80 per cent of women who start their own business know someone else who did as well.

Finding and promoting senior female business leaders, however, was – and is – much easier said than done.

The latest Grant Thornton International Business Report shows that ‘globally, 24 per cent of senior management roles are now filled by women.’

Francesca Lagerberg, head of tax at Grant Thornton UK and incoming global leader of tax at Grant Thornton International Ltd, said, “The economies where growth is high have greater diversity in their senior management teams.

“Women are playing a major role in driving the world’s growth economies, bringing balance to the decision making process.

“In comparison, the mature economies are now playing catch up.”

In Japan 7 per cent of senior roles are occupied by women, the worst performer, and Japan, the UK with 19 per cent and the USA 20 per cent are in the bottom eight countries for women in senior management.

The situation is even starker when looking at boardroom positions. In the G7, just 16 per cent of board members are women. This compares to 26 per cent in the BRIC economies and 38 per cent in the Baltic states.

In the UK, one area of business that is thriving is the social enterprise sector.

Research published in July 2013 by Social Enterprise UK (SEUK) in the People’s Business Report shows that not only are social enterprises out-performing traditional businesses, they are also reaping the benefits of a relatively diverse workforce.

‘Social enterprises,’ says the report, ‘are far more likely to be led by women than mainstream businesses – 38 per cent of social enterprises have a female leader, compared with 19 per cent of small and medium enterprises (SMEs) and three per cent of FTSE 100 companies.’

And in addition, ’91 per cent of social enterprises have at least one woman on their leadership team’, whereas ’49 per cent of mainstream SMEs have all-male directors.’

SEUK recommends that to address the barrier created by the lack of access to finance, investors and policy makers ‘design financial products and support programmes’ to better reflect the needs of the sector, rather than expecting social enterprises to fit into current, traditional business structures and processes.

The report also recommends full implementation of the Social Value Act.

This would make it mandatory for public authorities to consider the community benefit of any contract awarded, which could make it easier for smaller enterprises to win more work.

Currently, social enterprises contribute £18.5 billion a year to the UK economy.

Imagine how much greater that value could be if the women wanting to work were able to work.

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